This article is from the Australian Property Journal archive
MIRVAC AQUA has frozen redemptions on its High Income Fund and Enhanced Income Fund for up to six months.
In addition, the Mirvac AQUA Income Fund Product Disclosure Statement has also been withdrawn from the market.
The investment manager said given the current market conditions, it is undertaking a “stress testing” of its loan portfolios.
In early July, Mirvac AQUA appointed a Receiver and Manager to one of these loans. As a result of this, the Manager determined that several loans contained in the Mezzanine Debt Pool (into which the High Income Fund and Enhanced Income Fund directly invest) are impaired.
The impaired loans total $39 million in value and comprise 20.4% of the total assets (cash and mortgages) of the High Income Fund and 10.5% (cash and mortgages) of the Enhanced Income Fund.
In addition, Mirvac AQUA expects the returns from the High Income Fund will fall to between 5% and 6% per annum.
“The Enhanced Income Fund will be also be impacted, however we do expect that the returns will decline less, to between 6% pa and 7% per annum. We wish to advise that there is no impact on the returns to the Income Fund or the value of its unit price,” Mirvac AQUA chief executive Stephen Tunley said.
|
Mirvac AQUA Fund |
Fund size |
Liquidity (on look through basis), expressed as a% of total Funds Under Management (FUM) |
Cash |
|
Income Fund |
$54m |
26.6% |
$14.4m |
|
Enhanced Income Fund |
$6.3m |
43.7% |
$2.8m |
|
High Income Fund |
$183m |
51.6% |
$94.7m |
Tunley said the portfolio review will be concluded as quickly as possible and within two months it expects to discuss the portfolio in more detail.
“Whilst investors in the Mirvac AQUA Income Fund have no exposure to the impaired loans, the RE is aware that there are a high proportion of investors with investments in both the Mirvac AQUA Income Fund and the Mirvac AQUA High Income Fund.
“Given this the RE recommends that it is also in the best interest of all unit holders to suspend applications and redemptions in all of the Mirvac AQUA funds for up to six months,” he concluded.
Australian Property Journal
